If you think property taxes are a little confusing in Cook County, you`re right.
Somehow, over the years, the county has ended up with one of the most complex, illogical systems in the country. Bills are nearly impossible to predict or figure out in advance.
Tax reassessment appeals are encouraged as an accepted part of negotiating the system. And every year the tax bills come out later.
”Remember taxation without representation? This is taxation without explanation,” said Andrea Raila, a North Side property tax consultant who guides the uninitiated through the perilous system.
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”What (we`ve) found is that the system mystifies taxpayers, that nobody is accountable, that public officials point fingers at one another and nobody knows who to blame,” added James Nowlan, president of the Taxpayers Federation of Illinois, which has been laboring to reform the system.
Take, for instance Illinois` unique formula for setting the assessed value of homes. In many states, property is assessed at its market value, then different tax rates are set for different kinds of property. The owner of a $150,000 home, for example, can easily figure the tax bill on the property by multiplying the home`s value by the tax rate, expressed as a certain number of dollars or cents per $100 of value.
Not in Illinois. Here, the assessor determines your house`s fair market value but instead uses only a percentage of it to calculate the tax bill.
The percentage depends on where you live-in Cook County it`s 16 percent and in much of the rest of the state it`s 33.3 percent.
But it gets even more complicated. The state, not wanting to be unfair to Downstate and collar county taxpayers, then issues an equalization factor, called the multiplier, designed to even up Cook County with the rest of the state.
The problem is, most times Cook County homes aren`t really assessed at 16 percent of their market value but at an even lower percentage for reasons no one quite understands. So every year a new multiplier must be issued, based on how far off everybody thinks those Cook County assessments are.
The bigger the multiplier gets, the more the assessments are off. This year it`s 2.0523, the highest it`s ever been.
Then there`s the problem of property classifications. Cook County has five, for single family homes, apartments, industrial property, commercial property and vacant land. All are taxed at different rates. Then there are eight sub-classes that hardly anybody knows about, even though getting into one or more of them could reduce your bill.
Is all this making the federal income tax 1040 form look easy by comparison? Well, that`s just the start.
Nowlan, whose federation is working on a new study of Cook County`s taxing problems, is happy to point out a few of the other problems groups like his have been struggling to correct for years:
– The system is too slow. The time lapse between when local governments pass their budgets and the money arrives can be one to two years.
– Nobody can plan. With the level of taxes a mystery for most property owners until the bill arrives, nobody can put away the proper amount of money in advance.
– Tax installments are uneven. Unlike other counties, where taxes are paid in two equal installments, Cook County property owners pay half of last year`s bill as the first installment, and then whatever the difference is between that and this year`s bill in the second installment. In some cases the second installment dwarfs the first.
It all adds up to, well, a mess.
”The current property tax system is arcane, intentionally complicated and designed to mislead taxpayers,” said Eugene Mahoney, legal counsel for People United for Responsible Government Expenditures, a non-profit group of homeowners and businessmen seeking to streamline government.
Solving the problems, however, seems even tougher than figuring out your bill in advance, particularly since many of the problems are entrenched in state law, not Cook County procedures.
For his part, Cook County Clerk David Orr has his staff looking into ways to streamline the process, he says. And the recent move from a process of reassessing every four years to every three years is designed to help.
A new law designed to limit excessive levies by local government units also will take effect next year, making the process of determining what money the taxing bodies deserve easier.
In Cook County, switching to a system of annual assessments, like that used in the collar counties, also could help, said Raila, the property tax consultant.
”Annual assessments are very healthy,” she said. ”They keep market values very close to what they actually are. You don`t get these huge increases.”
But something, anything, must be done, she and others believe.
”I`m not critical of the people who are administering the law,” said Ferd Isserman, an Old Town property manager who saw a 700 percent increase this year in the assessment of some of his buildings. ”But we are saying we need to take a good look at the law and re-evaluate it.”
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Right now, he said, ”the whole thing is crazy.”